Saudi Arabia and Syria signed an accord Tuesday, February 20, to set up a free trade area between the two countries, the official SANA news agency reported. The deal, signed by Saudi Foreign Minister Saud Al-Faisal and his Syrian counterpart, Faruq Al-Shara, envisions the agreement coming into force on January 1, 2003, SANA said.

Syria has already signed free trade accords with several Arab countries, most recently with Iraq in late January.

A joint statement said afterwards that the accord will provide reciprocal exemption from customs duties and all other taxes goods produced in Syria and Saudi Arabia.

Syrian Economy and Foreign Trade Minister Mohammad Al-Imadi told journalists that the accord would also result in an increase in joint investments, cultural and tourism exchanges and "open up the possibility of a common market."

For his part, Rateb Shallah, president of the Syrian union of chambers of commerce, said the deal would cut tariffs immediately by half, dropping them to zero in 2003.

A meeting of the Saudi-Syrian commission, to be co-chaired by Shara and Prince Saud, was also to discuss agreements to facilitate road transport, and cooperation in agriculture, tourism, oil and banking, Syrian Vice Minister for Economy and Foreign Trade Shebli Abu Fakher said.

He said the agreement will increase significantly bilateral trade, which stood at $300 million in 1999. Syria exports food and textiles to Saudi Arabia and imports petroleum and petrochemical products.

The government newspaper Syria Times last week said the joint commission would also discuss joint industrial projects worth $800 million to be set up in Syria.

Those projects, drawn up by the Syrian state run General Establishment of Chemical Industries, include a $90 million glass factory, a $300 million phosphate fertilizer plant and a chemical urea plant worth $400 million.

Damascus and Riyadh traditionally maintain good relations. Syrian President Bashar Al-Assad last week discussed in Riyadh with King Fahd ways to advance the Middle East peace process and bilateral cooperation and received Prince Saud on Tuesday. — (AFP, Damascus)